The Department of Health and Human Services Office of the Inspector General (HHS-OIG) was established by Congress in 1976 to identify and eliminate fraud, abuse, and waste in HHS programs and to promote efficiency and economy in departmental operations. The OIG is responsible for conducting audits, evaluations, and both criminal and civil investigations for all HHS agencies. These functions are performed by the OIG's Office of Audit Services (OAS).

Feeley & Driscoll's OIG Update is a compilation of the latest and greatest additions from the OIG's website, listed in approximate order of greatness rather than lateness.

A biweekly publication from the Healthcare Group at Feeley & Driscoll, P.C. This email is also accessible from the F&D website by clicking through to our OIG Updates Archive.

In this issue

1. Safeguards Over Controlled Substances at the National Institutes of Health Clinical Center Pharmacy for the Period May 2006 to June 2007
2. Review of Kaiser Foundation Hospital-Vallejo's Reported Fiscal Year 2005 Wage Data (A-09-07-00083)
3. Review of Excessive Payments for Inpatient Services Processed by National Government Services in Michigan and Wisconsin for Calendar Years 2004 and 2005 (A-05-07-00069)
4. Review of High-Dollar Payments for Inpatient Services Processed by Palmetto GBA, Intermediary #382, for the Period January 1, 2004, Through December 31, 2005
5. Review of High-Dollar Payments for Inpatient Services Processed by Palmetto GBA, Intermediary #380, for the Period January 1, 2004, Through December 31, 2005
6. Allowability of Costs Claimed for Reimbursement Under Mississippi’s Bioterrorism Hospital Preparedness Program for the Period September 1, 2004, Through August 31, 2006 (A-04-07-03518)
7. National Institutes of Health's Handling of Allegations Concerning Conflict of Interest and Ethics Violations (OEI-03-07-00220)
8. Updated Exclusion and Reinstatement Files

1. Safeguards Over Controlled Substances at the National Institutes of HealthClinicalCenter Pharmacy for the Period May 2006 to June 2007 (A-03-07-00353)
http://www.oig.hhs.gov/oas/reports/region3/30700353.pdf

From May 2006 to June 2007, the NIH Clinical Center Pharmacy (the Pharmacy), located in Bethesda, Maryland, did not always appropriately secure its Schedule II controlled substances (Schedule II substances) or adequately segregate duties for ordering and receiving the substances.  Schedule II substances have the highest potential for abuse among controlled substances with an accepted medical use.  The Pharmacy procures and dispenses Schedule II and other substances to inpatients and outpatients participating in intramural research protocols at the Clinical Center. As a result of the deficiencies that the OIG found, Schedule II substances were vulnerable to loss, diversion, and mismanagement.  The OIG discussed the OIG's findings with a Pharmacy official, who concurred and immediately implemented corrective actions. The OIG recommended that NIH ensure that the Pharmacy continues to enforce its policies and procedures to secure and control Schedule II substances.  NIH concurred with the OIG's recommendation.

2. Review of Kaiser Foundation Hospital-Vallejo's Reported Fiscal Year 2005 Wage Data (A-09-07-00083)
http://www.oig.hhs.gov/oas/reports/region9/90700083.pdf

Kaiser Foundation Hospital-Vallejo (the Hospital) overstated its wage data by $11.8 million and 252,882 hours in its fiscal year (FY) 2005 Medicare cost report.  Correcting the Hospital's errors increased the average hourly wage rate from $49.75 to $50.17.  Under the acute-care hospital inpatient prospective payment system, the Centers for Medicare & Medicaid Services (CMS) adjusts the Medicare base rate paid to participating hospitals by the wage index applicable to the area in which the hospitals are located. CMS updates the wage indexes annually based on hospitals' reported wage data. The OIG recommended that the Hospital submit a revised FY 2005 Medicare cost report to the fiscal intermediary to correct the wage data overstatements and strengthen review and reconciliation procedures to ensure that the wage data reported in future Medicare cost reports are accurate, supportable, and in compliance with Medicare requirements.  In its written comments on the OIG's draft report, the Hospital provided information on actions taken to implement the OIG's recommendations.

3. Review of Excessive Payments for Inpatient Services Processed by National Government Services in Michigan and Wisconsin for Calendar Years 2004 and 2005 (A-05-07-00069) http://www.oig.hhs.gov/oas/reports/region5/50700069.pdf

Of the 172 high-dollar payments ($200,000 or more) that National Government Services, a Medicare fiscal intermediary, made to hospitals for inpatient services for calendar years 2004 and 2005, 65 were appropriate.  The remaining 107 payments included net overpayments totaling $1.6 million, of which $1.3 million for 105 payments had not been repaid at the start of the OIG's audit. The OIG recommended that National Government Services recover the $1.3 million in identified overpayments, use the results of this audit in its provider education activities related to data entry procedures and proper documentation of charges, and consider implementing controls to identify and review all payments greater than $200,000 for inpatient services.  National Government Services agreed with the OIG's recommendations and stated that the 105 outstanding claims were adjusted and monies were recovered by April 30, 2008.

4. Review of High-Dollar Payments for Inpatient Services Processed by Palmetto GBA, Intermediary #382, for the Period January 1, 2004, Through December 31, 2005
(A-04-07-06023)
http://www.oig.hhs.gov/oas/reports/region4/40706023.pdf

During calendar years 2004-2005, Palmetto GBA (Palmetto) overpaid 133 claims totaling $845,000.  Generally, Palmetto made the overpayments because the providers incorrectly billed excessive units of service.  In its written comments on the OIG's draft report, Palmetto agreed to recover the $844,000 in overpayments.  Palmetto stated that it would use the results of this audit to enhance its provider education activities and agreed to implement controls to identify and review all payments greater than $200,000 for inpatient services. 

5. Review of High-Dollar Payments for Inpatient Services Processed by Palmetto GBA, Intermediary #380, for the Period January 1, 2004, Through December 31, 2005
(A-04-07-06022)
http://www.oig.hhs.gov/oas/reports/region4/40706022.pdf

During calendar years 2004-2005, Palmetto GBA (Palmetto) overpaid nine claims totaling $111,000.  Generally, Palmetto made the overpayments because the providers incorrectly billed excessive units of service.  In written comments on the OIG's draft report, Palmetto agreed to recover the $111,000 in overpayments and adjust the claims.  Palmetto stated that it would use the results of this audit to enhance its provider education activities and agreed to implement controls to identify and review all payments greater than $200,000 for inpatient services. 

6. Allowability of Costs Claimed for Reimbursement Under Mississippi’s Bioterrorism Hospital Preparedness Program for the Period September 1, 2004, Through August 31, 2006 (A-04-07-03518)
http://www.oig.hhs.gov/oas/reports/region4/40703518.pdf

The $7.4 million the State agency claimed for reimbursement for the period September 1, 2004, through August 31, 2006, was allowable, allocable, and reasonable.  Accordingly, this report contains no recommendations.

7. National Institutes of Health's Handling of Allegations Concerning Conflict of Interest and Ethics Violations (OEI-03-07-00220)
http://www.oig.hhs.gov/oei/reports/oei-03-07-00220.pdf

The most common conflict-of-interest or ethics allegations at the National Institutes of Health (NIH) involved employees not completing required ethics training or ethics forms.  The majority of these allegations were resolved within NIH; however, for one-third of allegations, no final resolution was documented.  NIH's Office of Management Assessment (OMA) handles allegations of noncriminal employee misconduct and conflicts of interest related to NIH programs and activities.  The NIH Ethics Office, individual ethics offices within each of the Institutes and Centers (Institutes) at NIH, and the Office of the General Counsel (OGC) Ethics Division at NIH have a role in handling conflict-of-interest and ethics allegations involving NIH programs.  The OIG also found that the majority of Institutes do not have written procedures regarding how to handle allegations and do not handle allegations uniformly.  These Institutes do not have Institute-specific policies or procedures for reviewing allegations regarding violations of the conflict-of-interest statutes and ethics regulations.  Institutes reported that when handling an allegation, they do not uniformly confer with the NIH Ethics Office, the OGC Ethics Division, or OMA.  In addition, coordination in handling allegations among the NIH Ethics Office, OMA, and the OGC Ethics Division occurs but is not formalized in a written policy. Based on the OIG's findings, the OIG recommended that NIH:  (1) develop a formal, written policy outlining how allegations of conflicts of interest and ethics violations are to be handled among the Institutes' ethics offices, the NIH Ethics Office, the OGC Ethics Division, and OMA; and
(2) ensure that documentation detailing how allegations are ultimately resolved is maintained.  In its comments to the draft report, NIH concurred with the OIG's two recommendations and stated that both have been implemented in a new chapter of the "NIH Policy Manual."

8. Updated Exclusion and Reinstatement Files
For the List of Excluded Individuals/Entities (LEIE), follow this link:
http://oig.hhs.gov/fraud/exclusions/listofexcluded.html

The exclusions are contained within the full "Updated LEIE" database file reflecting all OIG exclusion and reinstatement actions up to, and including, those taken in September of 2008. This new, "Updated LEIE" (List of Excluded Individuals and Entities) is a complete database file containing all exclusions currently in effect. Individuals and entities that have been reinstated to the federal health care programs are not included in this file. This new file is meant to REPLACE the "Updated LEIE" file made available for download last month. The new file is complete and need NOT be used in conjunction with the monthly exclusion and reinstatement supplements. You can download the full "Updated LEIE Database" from here:

For the index of recent they Advisory Opinions, follow this link:
http://oig.hhs.gov/fraud/advisoryopinions/opinions.asp

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